How can I make my forwarder more sustainable?
Created on January 20, 2023
In this article you will get:
If you are a forwarder who is tuned in to market trends and knows that sustainability is a hot topic in the freight forwarding and logistics industry, but keep asking yourself “How can I make my forwarder more sustainable?”, this blog post is for you.
Sustainability and logistics: what’s the connection?
The impacts of climate change have never been more apparent. Sustainability is and will be a key factor for all logistics businesses. Not surprisingly, topics related to the environment and sustainability were among the freight forwarder trends for 2023.
Unfortunately, the logistics sector was one of the last to join the “green” business wave. This is because, although sustainability itself can save costs, forwarding companies are afraid of investments and complicated systems that can cause unexpected obstacles that result in extra costs.
As the focus on sustainability increases as a result of the urgency of climate action, companies are adapting their logistics processes to a new sustainable framework that includes warehousing and transportation.
Sustainable logistics can be defined as a series of measures to be adopted with the aim of reducing the environmental impact caused by the logistics sector. Sustainable logistics and supply chain management play an important role in reducing the environmental footprint, but also in managing risks and reducing waste costs.
Sustainable logistics practices and its benefits
The transportation sector lags behind only the energy sector in terms of CO² emissions and greenhouse gas production. This means that it is responsible for one-fifth of global CO² emissions.
Furthermore, the industry’s contribution to CO² emissions has increased by 1.9% annually since 2000, most of which can be attributed to increased globalization and increased demand for consumer goods.
As the consumer creates the need for more movement of goods, how can logistics companies meet the demand and achieve a sustainable footprint at the same time?
- Evaluate your logistics operations to see where sustainability improvements can be made;
- Select sustainable transportation methods and energy sources;
- Create/route loads through distribution locations based on proximity to avoid unnecessary miles;
- Optimize routes to minimize travel distance and possible congestion/ idle time;
- Improve space utilization and minimize discarded products due to damage during transportation.
- Explore the use of green technology wherever possible. There are several new technologies that can help your forwarder be more sustainable, for example, slow steaming, sky sails, and low carbon fuels;
- Replace traditional packaging with sustainable packaging;
- Choose sustainable suppliers that meet your environmental standards.
In addition to these practices, there are several other ways to make your forwarder more sustainable.
When exploring the ways of sustainable logistics, keep in mind that the goals of sustainable logistics are focused on 4 main points: reduction of CO² emission, conscious use of resources, proper residue disposal, and optimization of transport routes.
Remember that a green supply chain is achieved by successfully integrating environmentally responsible principles into supply chain management.
Furthermore, for forwarding companies that invest in more sustainable and transparent supply chains, there are potential benefits throughout the business, including:
- Cost control: Energy costs decrease, for example, when companies set emission targets with suppliers and help them identify possible areas for improvement.
- Smart logistics planning delivers high-profit margins: The more efficient your system, the higher your profit margins. For example, using green vehicles reduces fuel costs, especially for companies operating in regions where diesel prices are higher than average.
- Brand loyalty and reputation building: Using sustainable logistics management systems and reducing your carbon footprint increases customer affinity with your brand and gains publicity for you.
- Investor relations: Institutional investors are aware of the reputational risk of unsustainable supply chain operations. Almost half of the investors in a recent Gallup research expressed interest in sustainable investment funds.
Ride the green wave!
Making your forwarder more sustainable may seem daunting at first, but if you get started with these changes, eventually they will become habits you don’t even think about anymore. As the cliché goes, tomorrow is another day – and when it comes to the environment, the faster we all take steps in the right direction and change our ways now, the better off our planet will be tomorrow.